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Surprise pick-up in house price growth defies Brexit pessimism

Average house prices across the UK increased by 0.6 per cent in August, taking the annual rate of growth to 5.6 per cent, according to the Nationwide.

“The pick up in price growth is somewhat at odds with signs that housing market activity has slowed in recent months. New buyer enquiries have softened as a result of the introduction of additional stamp duty on second homes in April and the uncertainty surrounding the EU referendum. The number of mortgages approved for house purchase fell to an 18-month low in July” explains Robert Gardner, Nationwide’s chief economist.

“However, the decline in demand appears to have been matched by weakness on the supply side of the market.  Surveyors report that instructions to sell have also declined and the stock of properties on the market remains close to thirty-year lows. This helps to explain why the pace of house price growth has remained broadly stable” says Gardner.

Gardner says what happens this autumn on the demand side will be determined chiefly by the labour market and confidence amongst prospective buyers.

He warns that business surveys suggest that the manufacturing, services and construction sectors all slowed sharply in July, and, if sustained, this is likely to have a negative impact on employment and household budgets. 

“Most forecasters, including the Bank of England, expect the economy to show little growth over the remainder of the year. The Monetary Policy Committee’s decision to lower interest rates from 0.5 per cent to a new low of 0.25 per cent will provide an immediate benefit to many mortgage borrowers, though for most the boost will be fairly modest” he cautions.

For some families, this saving will only be around £15 per month. 

The latest Nationwide index puts the average price of a home in the UK at £206,145.

  • Terence Dicks

    Surprise??

    Jon  Tarrey

    Could I point out that we haven't actually left yet. Come back to me when Article 50 has been triggered, if it ever actually is. We still have no clue when we'll be leaving, what the new relationship will look like or what deals we will be able to make. It's all still very up-in-the-air. All seems like a load of faff over nothing, given very little will actually change after Brexit. What a waste of time, money, effort and column inches. If I never have to hear the words Brexit and Farage again, I'll die a happy man.

     
  • Anonymous Coward

    What did everyone expect? Serious buyers still outnumber serious sellers. We had a couple of months of screaming overpricing here in the south east, followed by price reductions, but those prices were still higher than a few months before. Those vendors who weren't serious came off the market, the others agreed a price and moved.

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    Remember these are just Nationwide's mortgage figures.....

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